Reforming procurement processes: Monitoring, evaluation and adaptability are key

Jul 25, 2024 3:35:42 PM

"The Public Procurement Bill marks a pivotal moment in the country’s efforts to reform procurement processes at all government levels. It is vital if South Africa is to truly achieve its economic and social objectives and stimulate economic activity."

Reforming procurement processes: Monitoring, evaluation and adaptability are key

By Paul Vos, General Manager, CIPS Southern Africa

The Public Procurement Bill marks a pivotal moment in the country’s efforts to reform procurement processes at all government levels. It is vital if South Africa is to truly achieve its economic and social objectives and stimulate economic activity. Careful monitoring, ongoing evaluation, and a willingness to adjust are imperative for its effectiveness. The Chartered Institute for Procurement & Supply (CIPS) welcomes the provisions of the Bill but emphasises that its success hinges on how well it is executed.

Its success will depend heavily on the ability of institutions to adapt to new roles and responsibilities.

The Bill, touted as the solution to corruption and wasteful expenditure at a governmental level, is expected to be signed into law soon after being assented to by Parliament recently.

One of the more significant changes introduced by the Bill is the establishment of a centralised Public Procurement Office (PPO), tasked with ensuring compliance, promoting standards, and fostering transparency.

Centralised oversight may lead to more standardised procurement practices, reducing discrepancies and promoting fairness, but it also carries risks.

There is a danger of creating bureaucratic bottlenecks, where the PPO could become a choke point, slowing down procurement processes rather than streamlining them. Over-centralisation may stifle local agencies' ability to tailor procurement strategies to specific needs.

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One fundamental challenge public procurement teams face today is the overregulation of the procurement landscape, which not only creates rigidity but also stifles innovation.

There is hope that the legislation will drive economic empowerment through state organs and, more significantly, serve to grow small and medium-sized enterprises, exempted micro-enterprises, beneficial ownership, and black women-owned companies.

Even as acknowledged in Parliament during this election period, Black Economic Empowerment (B-BBEE) has served to make only a few citizens wealthy, while the rest of the people of this country suffer from hunger and poverty. Where BEE should have economically empowered the vast majority of our people, public sector spending runs into billions of rand, and our people are not empowered.

Another issue is the repealing of the Preferential Procurement Act through the Public Procurement Bill. Questions must be raised about how the new preferential procurement framework will be rolled out and its intention to align with the BEE Act and B-BBEE Codes of Good Practice.

Despite these concerns, CIPS welcomes sections 28-29 of the Bill, which advocate using technology to modernise procurement. This includes developing an ICT-based procurement system to enhance operational efficiency and accessibility.

Using digital platforms is a no-brainer way to streamline procurement processes, reduce paperwork, and make opportunities more accessible. Digitisation also has the potential to deliver on the integrity and best practices for all organs of state.

The expectation is that the availability of the correct data, coupled with smart analytics, will lead to the establishment of global framework agreements for homogenous spending categories across government departments.

CIPS has identified Critical Success Factors (CSFs) that need to be implemented in the next two years for South Africa to benefit from the legislation:

The PPO should be established within the National Treasury to perform functions related to the legislation impartially and without fear, favour, or prejudice
Every procuring institution must establish a procurement function to maintain this Act
The accounting officer of a procurement institution is responsible for defining procurement needs, implementing an efficient and effective procurement system, and preventing non-compliance by investigating corruption and tampering
No public office bearer, including an employee of parliament, municipality, or provincial legislature, may submit a bid
The minister must prescribe measures for the public, civil society, and media to monitor procurement processes with certain limitations
Suppliers may be debarred on the database for corruption, fraud, collusion, price fixing, breach of confidentiality, or non-performance
A person who commits an offence receives a fine, imprisonment not exceeding ten years, or both. In addition, the court may also order that the amount of loss incurred by the complainant must be compensated

Paul Vos, General Manager, CIPS Southern Africa